According to data from Shengyi Society’s spot trading platform, the domestic PP market fluctuated at a high level in late April, with prices of various product brands falling more and rising less. As of April 21st, the benchmark price for PP wire drawing offered by Shengyi Society is 9183.33 yuan/ton, an increase of 0.18% from the beginning of the month.
| Gamma-PGA (gamma polyglutamic acid) |
price trend
In terms of raw materials:
Currently, the market’s concerns about the production and transportation of Middle Eastern crude oil under the influence of geopolitical factors have eased, and the international oil price premium is rapidly shifting towards negotiations to ease expectations and resonate with negative fundamentals. The signals of US Iran peace talks continue to rise, with intermittent resumption of navigation in the Strait of Hormuz. The IEA has lowered its supply and demand expectations, while API inventories have surged. Under the combination of multiple factors, a pattern of weak crude oil has emerged, and the remote cost value of PP has fallen at a high level. In the early stage of propylene production, the centralized maintenance of enterprise equipment has been implemented, and the demand side has steadily received goods. Spot prices have risen to a high level, but the price center has recently rebounded. Although there are still not many shipments of propane at the port, overseas prices have been significantly lowered in the early stages, while domestic spot prices have remained strong in recent days. Overall, the prices of various PP raw materials have fluctuated, which has loosened the support for PP costs.
Supply side:
In mid April, there was a mutual occurrence of maintenance release and return of domestic PP enterprises, and the overall operating rate position was said to have rebounded. As of press time, the overall load of the domestic industry has risen to around 71%. The industry’s loss of production capacity has shrunk, and the current inventory level has rebounded to around 800000 tons, while imports to the port are at a low level. Overall, the supply side still has support for spot prices.
In terms of demand:
Affected by the high mid-term spot prices, the overall trading atmosphere in the downstream market of the industry is cautious. Last month, oversold contracts and chasing orders from refineries were basically delivered, but the current transaction pace has slowed down and warehouse building operations have decreased. Buyers often use and take as you go, with scattered small orders being the main focus. Some terminal small and micro enterprises that have reduced production and stopped production due to high cost pressures have limited resumption of work, while large and medium-sized enterprises continue to stabilize and acquire goods. The overall demand side is in a wait-and-see situation, with performance falling short of market expectations and average support for PP.
future market forecast
In late April, the domestic PP market prices fell sharply from high levels. Fundamentally speaking, the industry’s load position has basically moved out of the historical low range, but the recovery of supply still requires time. The position of social inventory has rebounded, and port imports remain low. However, with a large production capacity base, the supply of goods can still meet the demand. In terms of futures prices, they have recently fallen, and the widening basis has dragged down spot prices. Business Society PP analysts believe that the current PP market is torn between long and short positions, with ambiguous guidance and insufficient market action in the future, and there may still be downward space.
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